What happens after the imposition of rent control

Assignment Help Business Economics

Reference no: EM131194384

The city of Lloydminster sits on top of the Saskatchewan-Alberta border. Half of the city is in Saskatchewan and the other half in Alberta. Assume that Saskatchewan enacts a rent control law that puts a ceiling on rents well below their equilibrium market value. Predict the impact of this law on the competitive equilibrium rent in the part of Lloydminster that is in Alberta. Note that residents are allowed to freely reside in either side (Alberta or Saskatchewan) of the city. a. Illustrate your answer with one demand and supply graph for the apartment market in the Saskatchewan side Lloydminster and another demand and supply graph for the apartment market in the Alberta side of Lloydminster. Your graphs should be drawn side by side to show the comparison. b. Make sure that your graphs clearly show (1) the initial equilibrium before the rent control in both markets and (2) what happens after the imposition of rent control. c. Clearly show any shifts in the demand or supply curves, and the movement along the curves for each market. d. Label your graphs fully and provide written explanation for your graphs.

Reference no: EM131194384

Questions Cloud

The nightmares of disintermediation and interest rate risk : Over the past 35 years, the banking system in the U.S. has undergone remarkable cycles of prosperity then adversity, culminating in the financial crisis of 2008-09. In the aftermath of this crisis, banks still face their three fundamental challenges ..

Decided to hold the money supply constant : During 2003, we began to stop worrying that inflation was a problem. Instead, we began to worry about deflation, a decline in the price level. Assume that the Fed decided to hold the money supply constant. What impact would deflation have on interest..

Barametric price leadership exsists when : Barametric price leadership exsists when

Eliminate waste in the potato-peeling process : A large food-processing corporation is considering using laser technology to speed up and eliminate waste in the potato-peeling process. To implement the system, the company anticipates needing to purchase the industrial-strength lasers.

What happens after the imposition of rent control : The city of Lloydminster sits on top of the Saskatchewan-Alberta border. Half of the city is in Saskatchewan and the other half in Alberta. Assume that Saskatchewan enacts a rent control law that puts a ceiling on rents well below their equilibrium m..

Absence of taxes-part of the dead weight loss of the tax : In the absence of taxes, Carlos would prefer to purchase a large fishing boat with a 75 hp motor. The government has recently decided to place a tax on boats with 75 hp motors or higher. Carlos is worse off, and his loss of welfare is part of the dea..

Influences the well-being of bystander : Melissa engages in an activity that influences the well-being of a bystander. In order for Melissa's activity to give rise to an externality, it must be the case that

Short case studies : The buyer didn't commence action to recover the excess payment until some nine months after delivery. Will the buyer succeed in recovering the excess?

Consider the following situations : Jane is going overseas and she offers to give her Lotus Super 7 sports car to Jack. The market value for this type of vehicle in good condition is around $25 000. Jack accepts.

User Account

All Pages